Emissions scandals could be a thing of the past

Looser fuel economy targets on the horizon.

Emissions scandals could be a thing of the past

American gas guzzlers are set to make a comeback as Donald Trump looks to wind back fuel economy targets.

Recently-adopted strict fuel consumption regulations in the United States could be scrapped by President Trump under proposed sweeping changes to the Environmental Protection Agency's (EPA) authority.

The move comes following meetings between Trump and the heads of America's big-three automakers, General Motors, Ford, and Fiat Chrysler who pointed out the financial pressure of meeting the 54.5 MPG (4.32L/100km) Corporate Average Fuel Economy (CAFE) target put in place by the previous Obama administration with a 2025 deadline.

Without expressly asking for CAFE targets to be lifted, Ford CEO Mark Fields has stated that up to 1 million jobs could be put at risk by the recently introduced standard, claiming that the target is at odds with market reality, which in the US favours SUVs and pickup trucks over smaller more efficient vehicles.

As a flow-on effect, Trump looks set to remove the control of CO2 emissions regulation from the EPA, and could also strip the authority of California's unique and much more stringent California Air Resources Board (CARB) which mandates a percentage of all vehicles sold within the state must meet zero emissions classification with a view to putting 1.5 million electric and fuel cell vehicles on the road by 2025.

An estimated US$200 billion (A$265 billion) cost has been attached to the more stringent CAFE regulations, with studies by the EPA indicating that America's automakers should be able to meet the targets without experiencing financial hardship.

Trump's "business first" approach will see regulations around environmental protection scaled back to reduce the cost to big business. That approach includes other areas such as reduced restrictions on mining and the rumoured abandonment of the Paris Agreement on climate change which the US became an active member of in November 2016.

Full details of the extent of changes to the 2025 CAFE regulations are still to be confirmed but early estimates put the rolled-back figures at between 50 MPG and 52.6 MPG (4.5 - 4.7L/100km). It is worth noting that CAFE standards are measured differently to manufacturer's published fuel figures, making the changes appear more stringent.

News of the rumoured changes to CAFE standards saw share prices for Ford, GM and Fiat Chrysler rise in reaction, likely increasing pressure to introduce the less stringent regulations.